Stacy’s Tax Tips
Welcome back to my weekly tax tips. Throughout tax season, I will give you some tax tips to hopefully make preparing and filing your taxes easier as well as give you incite on the new tax law changes for 2010:
If your adjusted gross income is $57,000 or less in 2009, you are eligible for free filing. Just go to www.irs.gov.
IRA contributions remain at $5,000 for 2009. Ensure that you contribute no later than April 15. Speak to your tax advisor to determine if you should be contributing to a Roth or Regular IRA. The 2009 business mileage rate is 55 ents. Don’t forget to let your accountant know of any education expenses you have paid in 2009 for yourself, spouse or dependents. There are credits ranging from $2,000-$4,000 if you qualify.
The IRS is allowing all donations to Haiti made between Jan 11, 2010 and March 1, 2010 to be put on either your 2009 tax return or 2010 (not both.)
If you bought a new home in 2009, speak to your tax preparer as you may be eligible for the first time home buyers credit $8,000 and a reduced credit for certain other home buyers of $6,500. Keep in mind that the Required Minimum Distribution is back. Ensure you speak to your broker to determine the amount and speak to your tax advisor to see if you should be withholding taxes as well.
2010 – The biggest change is that estate tax has expired just for this year. Suggestion: See your attorney if you have a trust set up just for 2010, as death in this year could cause some potential issues in inheritance.
2011 – Be prepared as tax rates are likely to increase. Long-term capital gains will likely increase to 20% and it is very important to see your CPA in 2010 to prepare for these changes. They will advise you regarding possibly not deferring income to avoid the increase in tax, etc.